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It has been a cautious opening to the...>

EGB SUMMARY
EGB SUMMARY: It has been a cautious opening to the week, with Italian BTPs
edging higher and broader periphery spreads steady, against the backdrop of the
EU budget submission deadline Monday.
- Cash Bund yields have bounced off lows, though the downtrend that began early
Friday is still in effect, amid geopolitical concerns (Chancellor Merkel's CSU`s
weak performance in Bavarian elections and Saudi tensions boosting core EGBs).
- BTPs have continued to edge higher, with 2-Yr yield down 2.2bps at 1.4595%.
10-Yr spread vs Bunds is down 4.0bps at 303.9bps, continuing to outperform Bonos
which are suffering from renewed expansive budget concerns - Spain spread v
Bunds is unchanged at 117.8bps.
- Italy PM Conte`s office says there will be a cabinet meeting at 1700 local
time, presumably the budget submission to Brussels will take centre stage.
- Portugal moved to investment grade Friday by Moody`s (from Ba1 to Baa3).
- A Eurex technical issue this morning delayed bond futures opening, and flow
remains fairly unremarkable.
- Quiet on EMU data today, with budget submissions deadline the highlight.

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